The Numbers are in: Replacing South Oak Creek and Columbia Coal Plants With Clean Energy will save customers millions of dollars

Last year, as part of WEC Energy Group’s rate case, analysis showed that customers were paying millions of dollars to keep uneconomic coal plants running. Between 2014 and 2018 the South Oak Creek plant alone cost customers more than 75 million dollars per year more than if the utility had just bought energy from the open market. Retiring this coal plant would save customers money, reduce environmental harm, and free neighboring communities from the detrimental impacts of coal pollution.

Through its subsidiaries, We Energies and Wisconsin Public Service (WPS), WEC is deeply invested in two of the dirtiest and most uneconomic plants still operating in Wisconsin today--the South Oak Creek and Columbia coal-burning power plants. Now, in a new analysis, Sierra Club also found that by 2028, if not sooner, WEC could cost-effectively replace the energy and capacity currently generated at these two coal plants with new clean energy. 

The graphs above show the cost of operating these coal plants (gray line) compared to the cost of replacing them with clean energy (green line), and the investment clearly pays off well before WEC’s stated plans to transition away from coal. There’s even more detail on the economics of Columbia in the recently released white paper, analyzing another utility owner, Alliant Energy. Replacing coal with clean energy by 2030 is totally possible; utilities just have to be willing to look at the math. 

Our analysis shows that by investing in clean energy, We Energies could retire South Oak Creek and WPS could give up its share of Columbia, to save Wisconsin customers millions of dollars. Yet, WEC and its subsidiaries have plans that aren’t anywhere close to where they need to be. To limit the worst impacts of climate change and reduce the economic burdens on ratepayers, we need more rapid, ambitious action to replace all coal-based power in Wisconsin with clean energy by 2030.

Across the country, coal-burning power plant operators have realized that their plants are losing money, and clean energy has emerged as a cost-effective replacement. Wisconsin is no exception to this economic shift. Just this spring, Alliant Energy proposed to retire its Edgewater coal plant more than a decade ahead of previous plans while committing to an investment in 1000MW of new in-state solar. These developments are signs of progress in Wisconsin’s transition from coal to clean. Still, our state’s utilities continue to cling to dirty, expensive coal despite the economic and environmental drain on customers. 38 percent of Wisconsin’s electricity (May, 2020) is generated by the eight coal-burning power plants that continue to operate across the state -- almost twice the national average when it comes to coal reliance. Wind and solar power are available, and thriving industries throughout the Midwest, but utilities aren’t taking advantage of clean energy in Wisconsin at the same rate as our neighboring states. We are falling behind.

Wisconsin utilities have retired over 3,000 MW of coal since 2010 and have proposed to take another 725 MW offline by 2022. Even with those transitions, almost 5,000 MW of coal capacity remains in the state. Wisconsin utilities like WEC have to clear a pathway to retire and replace that with clean energy. 

 

Replacing with clean energy won’t risk reliability

Clean energy has proven to be a reliable and affordable alternative to coal and other fossil fuel-generated power. Battery storage technology has steadily improved and become less expensive over time, too. The table shows a breakdown of how coal could be replaced without any risk to grid reliability. 

Related technologies, like energy efficiency and demand response also play an often overlooked role bringing affordable clean energy online. There is huge potential for energy efficiency and demand response programs that help save industrial and even residential customers money while making our grid more agile and reliable for future generations. These kinds of programs can help manage energy demand during peak times when the grid is stressed (like a hot summer day) so that everyone who needs it has it as affordably as possible. Since they do not rely on building new grid infrastructure, these technologies have the ability to save customers a lot of money, but WEC and its subsidiaries have been resistant to adopting them despite all the benefits for customers.

 

Clean Energy is Good for Wisconsin’s Economy

A pivot to clean energy would also provide economic and employment opportunities in the state to build those solar and wind farms and implement energy efficiency programs. In the five year period from 2015 to 2019, We Energies sent nearly $500 million to the state of Wyoming to pay for coal to burn at South Oak Creek. During that same period WPS sent over $200 million out of state to fuel its interest in Columbia. 

WEC knows that it is not a question of “if”, but a question of “when” these plants will be retired. Even WEC’s corporate investors, like BlackRock, have begun to scrutinize their portfolios in a significant move away from fossil fuel reliance. With BlackRock holding 9 percent of shares (WEC’s second largest investor), WEC is receiving pressure from all angles. There has never been a better time for them to act.

WEC must respond quickly by retiring South Oak Creek and pulling out of Columbia. Not only are these plants compromising the health of Wisconsinites in multiple regions of the state, polluting the environment, and contributing to climate change, these plants are unnecessarily, and exponentially, costing customers millions of dollars every year. Now is a critical time to make a decisive transition to clean energy and at last move beyond the dirty legacy of coal. The numbers are in; the math checks out. All eyes are on you, WEC. Coal must go. Now. 

 

Click here to call on We Energies to shut down the Oak Creek Coal Plant

 

 

 * We assumed the plant had a 50% capacity factor and an operating capacity of 1103 megawatts, according to We Energies 2018 reporting to EIA.